Have We Finally Turned the Corner?
As 2014 came to a close, it was all about good economic news.
As 2014 came to a close, it was all about good economic news. Leading off the parade: In December, the Dow Jones Industrial Average capped off a torrid year of 7.5% growth when it reached 18,000 for the first time. Meanwhile, GDP grew at a 4.6% annual rate in the second quarter and an even faster 5% in the third – a pace not seen since 2003. And on top of that, Americans saved $14 billion at the gas pump in 2014, and could save even more this year. Things are looking a bit brighter for 2015.
With all that good economic news, experts feel the job market will further strengthen in 2015 so the headline unemployment rate will slide ever closer to 5%. The labor market may remain a little bit soft as the long-term unemployed will be the last to find work, but as a whole it’s no wonder the Left is boasting of the “Obama boom.” Even those on the Right are admitting this may end the “Age of Suck.”
This general feeling of economic optimism is reflected in increasing consumer confidence. While some worried about sluggish Black Friday sales as well as slower than expected last-minute shopping at retailers as the Christmas season wound down, online purchasing was strong enough to keep sales right around their predicted growth rate for the 2014 season.
While some try to credit Barack Obama for the rebound, the good news is rooted in two areas the president has tried his best to obstruct.
One is an overall slowdown in government spending growth, which is declining as a percentage of GDP. Congress hasn’t done nearly enough to cut spending given its tendency to govern by continuing resolution rather than a set budget – meaning the Obama spending bonanza of 2009 and 2010 is the new minimum.
But as columnist David Harsanyi puts it, “After , Congress, year by year, became one of the least productive in history. And the more unproductive Washington became, the more the economy began to improve.”
The key date is 2010, when Republicans took over the House. Harsanyi argues gridlock has created part of this improvement, and there’s a compelling argument for that point. Imagine what we may have been saddled with had Republicans not taken over the House in 2010: endless government “stimulus” programs, cap and trade, and a faster implementation of ObamaCare for starters – all leading to a national debt far larger than the already-astronomical one we’re facing now.
Another part of the economic rebound stems from lower oil prices, which have plummeted by nearly half in the last six months. That steep drop is now reflected in gas-pump prices, resulting in what Citigroup estimates as an average $1,150 annual boost to consumers. This boom could have been amplified still further if not for Obama’s stalling of the Keystone XL pipeline or his refusal to open up federally controlled land to oil exploration. An activist EPA also waits in the wings with the potential for crippling regulations similar to those imposed on the coal industry.
Obama can try his best, but no president has figured out a way to kill the American free enterprise system. Its resilience has brought us out of numerous depressions, panics, recessions and economic slumps over the years as enough people found a way to work through or around the situation.
We will begin to see the effects of a truly divided government, with Republicans now totally in charge of Congress and Obama threatening to veto more legislation. “I haven’t used the veto pen very often since I’ve been in office,” Obama not-so-subtly threatened last month. “Now, I suspect, there are going to be some times where I’ve got to pull that pen out.”
While the economy is improving – at least according to the numbers our government releases, if not necessarily everyone’s personal situation – it will be up to those respective sides to make the case why things could be even better if their vision prevails. It’s a battle that will be joined as contenders for the 2016 presidential election come onto the scene and spell out their plans to continue the momentum.